The Mexican government withheld hundreds of millions of dollars in tax refunds owed to large corporations Colgate, Procter & Gamble and Unilever, in an effort to force them to pay more income taxes locally, an exclusive report by Reuters found, citing people close to the talks.

Mexico has been convincing these companies to come to their country, promising corporate tax breaks for years. Now the country is seeking more in tax revenue from these companies. With oil output decreasing and encouragement from the Organisation for Economic Co-Operation and Development to collect more taxes, Mexico is asking the large corporations to pay up.

Mexico's tax authority SAT withheld more than $384 million in value-added tax (VAT) from the three companies as it investigated them and almost 270 others for avoiding taxes. This started after President Enrique Peña Nieto took office in 2012, people familiar with tax negotiations say.

Unilever reached a deal with Mexico to pay more income tax in the country last year, three people familiar with the negotiations said. In return, Unilever was said to have received $131 million in VAT that it was owed. Procter & Gamble and Colgate have not reached deals with Mexico yet.

People familiar with the negotiations say Mexican tax authorities are withholding the refunds to convince companies to declare more revenue in Mexico.

"You negotiate because your money is stuck there," said a person close to the talks between SAT and one of the firms. "It's the best leverage in the world."

Tax attorneys say this practice of withholding VAT refunds is against the Mexican constitution.

"They don't have the right to condition your returns or blackmail you," said Rodrigo Muñoz, a Mexico City tax attorney and former president of the Mexican Academy of Tax Law. 

But, the tax authorities may be working in a gray area and might not be doing anything illegal, one accountant said.

The three consumer goods companies are not commenting on the tax matters in Mexico.